Cemex 1Q net profit up 18% to US$470m

Cemex said its net profit rose 18% in the first quarter to $470 million, helped by financial gains, while sales were boosted by the acquisition last year of Australia’s Rinker.

Cemex said its sales last quarter grew 26% to $5.4bn.

"The integration of Rinker and better supply-demand dynamics in most of our markets contributed to higher sales," Cemex said.

EBITDA, rose 10% from the year-ago period to $951 million. Operating profit fell 17%, however, to $461 million.

Cemex said it faced higher energy and transportation costs, while cost-reduction efforts brought down general expenses as a percentage of total sales.

Net profit was equivalent to $0.63 per American depositary receipt, up 15% from $0.55 per ADR a year ago.

Cemex said the higher net profit was mostly due to gains in financial instruments, and other net gains, including an extraordinary gain of $180 million from the sale of a stake in telephone company Axtel.

The results were above Cemex’s mid-quarter guidance of $5.3 billion in sales and $920 million in Ebitda.

The acquisition of Rinker for $15.3 billion significantly increased Cemex’s presence in the U.S., as well as its exposure to the slump in the U.S. housing market.

"Even in the face of the correction in residential spending experienced in the United States, we continue to reduce debt and improve efficiency," Cemex cited Hector Medina, Executive Vice President of Planning and Finance, as saying.

Cemex’s said it lowered its net debt by $91 million in the first quarter to $18.8 billion, although its debt ratio edged up to 3.7 times 12-months trailing Ebitda from 3.6 times at the end of 2007.

Cemex said cement sales volume in Mexico fell 7% in the first quarter from the year-ago period, and ready-mix concrete volume fell 15%, affected by the Easter holiday falling in March, and by delays in project starts in the infrastructure sector. Prices rose between 8% and 9% in dollar terms.

In the U.S., Cemex reported a 3% drop in cement volume, while ready-mix volumes grew 31% and aggregates sales more than doubled, because of the Rinker buyout. On a comparable basis, including Rinker’s sales from a year ago, cement volumes fell 21%, ready-mix fell 28% and aggregates fell 25%, affected by the housing downturn and bad weather in some states, Cemex said.